Why investors should care about China export data this week

China’s December exports, along with other data due out this week, are likely to point to a blockbuster turnaround from the glum conditions of recent months.

The data release, which begins in earnest Thursday with the publication of monthly export and import figures, could bolster the view that Chinese industry is on an upswing, marking a reversal from recent weakness.

Hong Kong brokerage Reorient believes earlier-released Taiwanese data, which showed the island’s December shipments to both China and the euro zone improving strongly for the month, is a harbinger of what lies ahead from the Beijing-based statisticians who track China’s trade activity with the world.

Reorient forecasts China’s exports for the month up 5% from a year earlier, lifting the value of goods shipped to around $180 billion. Imports are also to reflect improving conditions, rising 3% on year, with inbound shipments to top $165 billion, according to Reorient.

Lackluster demand in Europe and the U.S. should be offset by gains in shipments to Southeast Asia, where the emerging consumer classes are behind a major consumption boom, according to Reorient.

A further pickup in China’s imports of raw materials is also expected, with December data likely to reinforce the view of improving conditions. Australian trade data showed iron-ore shipments to China in a huge revival in December, a likely tipoff of the upbeat figures that can be expected from the official Chinese data, Reorient said.

Monthly bank-lending data should also point to easing credit conditions. Monthly new loans are likely to exceed 550 billion yuan ($88.32 billion), according to Reorient. The research house said it lifted its earlier view of 470 billion yuan in monthly new-loan issuance following media reports that indicated China’s big four banks, which typically account for 30% of lending, had issued 163 billion yuan in loans for the month.

Friday’s data releases will show consumer prices up 2.5% from a year earlier, fueled in part by higher food prices amid a patch of cold weather, according to Reorient.

Wholesale inflation data, also due out Friday, should also point to a further easing in deflationary pressures, the research house said. Producer prices will print at negative 1.8%, showing an easing in deflation of 2.2% in November, according to Reorient.

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